GEOLOGIST'S 'LAST CHANCE' GOLD CLAIMS MAY BE THE BEST CHANCE
by Jane Gaffin
Jane Gaffin is a Whitehorse-based freelance writer who specializes in mining.
(Originally published in the Whitehorse Star February 4, 2005)
Usually, the best place to look for gold is where gold is known to be. The Yukon is such a place.
And local exploration geologist Jim McFaull's unwavering faith in the remarkable noble metal was rewarded recently in the form of an option agreement with Vancouver-based Dasher Exploration Ltd.
McFaull's educated geological sleuthing may be the ticket to solving the riddle of where all Klondike gold originated.
The Whitehorse resident has always contended that gold will some day become an extremely valuable commodity. That is why he conducts all his independent work in gold properties.
He sees the world on the brink of serious financial difficulties and some currency collapses. Only those governments solidly backing their currencies with gold will come out winners.
Gold's most attractive feature is its virtual indestructibility, which is more than can be said for paper money.
As well, the precious yellow metal is sought for increased usage in denistry, medicine, jewellery, electronics, communication and the space industries.
It's been a long drought waiting for the tide to turn.
Now it's the seller's market again as the price of gold cleared the psychological $400 U.S. barrier. It wobbled between $410 U.S. to $450 U.S. per ounce over the past year and is expected to strengthen.
But the price hike is a double-edged sword. It carries economic ramifications. Gold is linked to inflation. When people lose confidence in the eroding value of paper money, they turn with trust to gold which is one factor driving up the price.
The negative side of the equation is offset with positives. The buoyancy bodes well for the sector of mineral explorers who work in gold. And exploration companies are looking North to satisfy their investment appetites with good gold projects, so they can raise capital on the stock market while the public is in an investing mood.
McFaull was in the right place at the right time doing the right thing. He may have hit the proverbial Mother Lode in more ways than one.
The recently-inked venture has great potential for a big pay off for a minimal amount of risk.
Dasher Exploration agreed to earn its interest in McFaull's Hunker Creek property by paying him $300,000 in cash over a period of three years, stated a January 27 news release. Additionally, the company must spend an aggregate of $3 million on the property and issue 700,000 common shares to McFaull.
The Dasher deal centers on the company acquiring a 100-percent interest in McFaull's 20 quartz (hardrock) mineral claims located in the historic Klondike mining district near Dawson City.
A confidentiality clause prevents either party from disclosing details for the moment about the geologist's theory that he has discovered the original source for all Klondike gold.
Of the 13 million ounces of Yukon placer gold produced over the last 107 years, the majority came from Klondike workings. Up until now, hardrock prospecting in the Klondike mining district failed to locate the source.
Placer mining generally means extracting gold from creeks as opposed to quartz mining that requires drilling and blasting to remove metals from rock.
McFaull, who has only worked the Hunker claims since July, 2002, has been investigating the gold source for about 20 years.
His geological, geophysical and geochemical bets are based on careful study. His theory supports a target model he developed while researching possible bedrock models for the source of Klondike gold, Dasher reported.
His curiosity dates back to the Dawson Lode project he initiated in 1986 and managed three years for United Keno Hill Explorations until 1989.
The objective was to find the source of Klondike placer gold on the 1,200 quartz claims staked by UKHM overtop Klondike placer workings. But he wasn't given much chance to test his findings.
A slump in the metal market and the federal government's cancellation of flow-through tax-incentive program put the hammer to his employer.
Like the captain of any ship, McFaull was last to bail. As acting exploration manager, he had the frustration of switching off the lights after everybody left the Black Street office in 1990.
During his 14-year tenure with UKHM, the talented young geologist set what must have been a record before celebrating his 35th birthday. Statistics indicate that only one in every 50,000 prospects makes a mine. He found seven; all went to production.
Collectively, the Galkeno Open Pit, new Silver King Underground, Ruby Offset, Hector 3 & 4 Vein Open Pit, Flame & Moth Open Pit, Black Cap Open Pit and Bellekeno Underground produced four million ounces of silver.
When the parent, Falconbridge Ltd. of Toronto, put its United Keno Hill Mines' Elsa assets on the auction block, along with its Yukon exploration properties, including the Dawson Lode claims, McFaull went freelancing (Star, Oct. 1/04).
In 1991, he researched and staked the Aurex claim block in the Mayo mining district. The Aurex claims abutted United Keno Hill Mines' camp. Instead of the traditional UKHM silver, the Aurex geology favored gold.
Two years later and a whack of dollars shorter, McFaull dreaded the idea of having to market his wares in Vancouver, knocking on doors and talking to promoters--if he could get a foot inside the door.
Prospectors survive on serendipity.
While McFaull was looking a financial angel, Yukon Revenue, a local company, was scouting for an investment property. They fortuitously crossed paths and cut a deal.
Yukon Revenue tied on 75 claims and carried out a large drill program. The work resulted in some good numbers. "It was exciting to see the visible gold coming from three holes," McFaull enthused.
While others took care of the Aurex property, McFaull concentrated on other business. By the summer of 2002, he had zeroed in on Hunker Creek, where the tributary flows into the Klondike River, near the Dawson City airport.
Accessibility is a logistical cost-saving measure that further renders the property appealing.
After revisiting his concepts about finding the source of Klondike gold that had tugged at his imagination for years, McFaull had to find a company with financial ability to drill it.
Dasher Exploration was keen. It was an appropriate setting for the two parties to close their deal during the major annual Round-Up mining conference in Vancouver the end of January.
McFaull, who earned his BSc in geology from the University of British Columbia in 1974, is past-president and long-time active member of the Yukon Prospectors' Association and the Yukon Chamber of Mines.
His invaluable research paper, titled "Report on the Yukon Quartz Mining Act and Its Regulatory Regime's Impact on the Free Entry System of Mining Law", was released in February, 2000.
The 50-page document tackles the complex legal issues and discusses the disincentives the government posed when introducing a discretionary licencing system to mining.
His predictions about what would be the ultimate fate of the mining industry and the Yukon's meal ticket have been proven correct in increments. Presently, there are no producing hardrock mines in the territory when a half a dozen should be operating full-tilt.
It was not accidental, but truly fitting, that he tagged his gold claims the "Last Chance".
If he is on the trail to the source of the Klondike gold system, his foresight has a good chance to save the Yukon mining industry from collpase, single-handedly.
It has the potential to either spark a stampede or at least a staking flurry.
north-land.com |
